NEW YORK ( TheStreet) -- iGo (Nasdaq: IGOI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 384.8% when compared to the same quarter one year ago, falling from -$0.40 million to -$1.94 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Computers & Peripherals industry and the overall market, IGO INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for IGO INC is currently lower than what is desirable, coming in at 25.90%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -17.90% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 500.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- IGO INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, IGO INC turned its bottom line around by earning $0.02 versus -$0.02 in the prior year. For the next year, the market is expecting a contraction of 450.0% in earnings (-$0.07 versus $0.02).